Exchange Rate Trends Research Articles

A Pre Post-COVID–19 Pandemic Review of Regional Connectivity and Socio-Economic Development Reforms: What Can Be Learned by Central and Eastern European Countries from the China-Pakistan Economic Corridor

This paper aims to highlight the role of mutual assistance of China and Pakistan’s regional connectivity through the China‑Pakistan Economic Corridor (CPEC) and show what lessons can be learned by Central and Eastern European Countries (CEECs). CPEC promotes trade, FDI, peace, and sustainable socio‑economic development, and it can help to alleviate the effects of COVID–19 in the region to promote socio‑economic development. In this study, we employed the Rolling Window Approach (Rolling Moving Average Approach) for data analysis of pre‑ and post‑COVID–19. It also focuses on before and after the CPEC initiative’s impact on the Pakistani economy through the Rolling Window Approach and graphical trends. In Pakistan, thanks to CPEC; trade, FDI, remittance, and the stock exchange (PSX) showed an upward shift. Terrorism decreased, which indicates a positive sign for peace and socio‑economic development. However, currency depreciation increased, and the exchange rate trend is going up against the dollar, hurting the economy badly in several ways, such as the balance of payment, current account deficit, and lower some exports. To mitigate these issues, Pakistan and China have taken steps as trade formulated in domestic currency between China and Pakistan. During COVID–19, the provision of health care equipment on a priority basis from China helped to combat the COVID–19 effects and stabilize Pakistan’s Economy. CPEC is structured to connect regional economic zones by forming local, regional, and global value chains. To cope with the COVID–19 impacts, socio‑economic reforms and regional cooperation are suggested for CEECs with a pre‑post circumstances review. Regional integration and cooperation are key to coping with this pandemic. CEECs can learn lessons from CPEC for socio‑economic development, reducing violence, and improving the economy.

An Analytical Study On Forecasting Exchange Rate In The Philippines Using Multi-Layer Feed Forward Neural Network

Exchange Rate is one of the economic indicators in the Philippines. It is the value of the nation’s currency versus the currency of another country or economic zone. This study aims to forecast the monthly Exchange Rate (y) of the Philippines from November 2018 to December 2023 using Multiple Linear Regression and Multi-Layer Feed Forward Neural Network. The researchers investigate the behaviour of each independent variables – Inflation Rate (x1), Balance of Payments (x2), Interest Rate (x3), Producer’s Price Index (x4), Export (x5), Import (x6), Money Supply (x7), and Consumer’s Price Index (x8) from Philippine Statistics Authority (PSA) starts from January 2007 up to October 2018. Multiple Linear Regression (MLR) was used to identify significant predictors among these independent variables. The Exchange Rate (y) had undergone first difference transformation. Upon running the regression analysis, it has concluded that only two independent variables are significant predictors, namely: Balance of Payments (x2) and Import (x6). Through these significant predictors, the MLR model was formulated. On the other hand, Multi-Layer Feed forward Neural Network (MFFNN) was also used to determine the forecasted values of Exchange Rate (y) for the next five years (2018-2023) given the said independent variables and obtained a model. The researchers compared the model of Multiple Linear Regression and Multi-Layer Feed Forward Neural Network by evaluating the forecasting accuracy of each method.It was concluded that Multi-Layer Feed forward Neural Network is the best fitting model for forecasting the
 Exchange rate (y) in the Philippines. This paper will serve as a tool of awareness for the government to forsee the trend of Exchange Rate in the Philippines on the next five years (2018-2023) for Monetary Policy making and to prevent the possible depreciation of peso vs. dollar.

УПРАВЛІННЯ ВАЛЮТНОЮ ДІЯЛЬНІСТЮ БАНКІВ В УМОВАХ НЕВИЗНАЧЕНОСТІ

The current foreign exchange activity of the bank takes place in conditions of economic uncertainty. Uncertainty means functioning in an economic environment that is constantly changing and complicated by a large number of factors. These factors are difficult to predict. The effect of uncertainty on the foreign exchange market is a consequence of sharp fluctuations in exchange rates. Currency fluctuations provoke an increase in the level of risks and unpredictable changes in financial results in banks. Therefore, managing the foreign exchange activities of banks is a complex process and requires financial managers to make effective management decisions. It is established that the state of the foreign exchange market determines the conditions of banks in it. A retrospective analysis of the dynamics of the foreign exchange market of Ukraine was conducted. In 2014-2015, the foreign exchange market developed under the influence of destructive factors. During this period, the hryvnia exchange rate devalued. Therefore, the NBU has applied a number of administrative measures. In 2016, the process of stabilizing the hryvnia against the US dollar began. In 2018–2019, the hryvnia exchange rate strengthened. However, the COVID-19 pandemic has changed trends in global commodity and financial markets. The influence of these factors changed the exchange rate trend in the foreign exchange market in Ukraine. The hryvnia devalued against the US dollar in 2020. In 2021, the exchange rate gradually stabilized. It is established that failure of banks to take into account the influence of these factors contributes to the growth of risks and deterioration of financial results. Therefore, it is important to create a system of management decisions in conditions of uncertainty. Such a system should consist of preventive and reactive measures. Preventive measures include the development and implementation of a set of solutions that will prevent possible threats. Reactive measures are formed when problems arise. These measures are formed at the expense of internal reserves and/or attraction of resources from external sources. If these measures do not work, the bank must change its currency strategy.

The impact of passenger's traffic on exchange rate and economic growth in Nigerian aviation industry

The aim of this study is to examine the impact of passengers’ traffic on Exchange Rate (ER) and economic growth in Nigerian aviation industry. This study adopts an ex-post facto research design, a systematic empirical inquiry in order to carry out the research. Secondary data was obtained from the Federal Airports Authority of Nigeria (FAAN) and National Bureau of Statistics (NBS). The study employed trend analysis on the time series data and regression analysis to explore the cause-and-effect relationship among variables. The result showed that the trend of exchange rate and aviation contribution to Gross Domestic Product (GDP) have been on increase over certain periods. Hence, the linear trend line shows a steady increase in the pattern of exchange rate and economic growth over the sample period of 2000 to 2020 with R-squared values of 0.714 and 0.824, respectively indicating a good fit of the line to the data. The regression analysis revealed that Passengers’ Traffic (PT) has a positive impact on ER and economic growth. Thus, with a T-statistic of 3.296 and probability of 0.004, it indicates a statistically significant effect on the dependent variable (i.e. Exchange Rate). Also, with a T-statistic of 6.119 and probability of 0.000, it indicates a statistically significant impact on the dependent variable (i.e. Economic Growth).

Exchange Rate Flexibility of Marine Export Trade Based on Artificial Neural Network

Feng, S.S., 2020. Exchange rate flexibility of marine export trade based on artificial neural network. In: Guido Aldana, P.A. and Kantamaneni, K. (eds.), Advances in Water Resources, Coastal Management, and Marine Science Technology. Journal of Coastal Research, Special Issue No. 104, pp. 641–644. Coconut Creek (Florida), ISSN 0749-0208.In recent years, the issue of exchange rate flexibility has attracted extensive attention in academic sphere. The appreciation of RMB will inevitably lead to the price changes of Chinese seafood in the international market, resulting in an impact on the import and export of Chinese seafood, the growth rate of marine economy and domestic employment. On the basis of artificial neural network, this paper puts forward a research method of exchange rate flexibility of marine export trade and constructs the exchange rate prediction model. Through analyzing the change trend of exchange rate, it can be seen that although RMB is faced with the pressure of devaluation by the rise of the US dollar index and the gradual increase of the interest rate of the Federal Reserve, yet the possibility of sustained large-scale devaluation of RMB is low. The method proposed in this work can realize accurate prediction of exchange rate flexibility. According to the prediction results, the government should take effective measures to mitigate the harm of exchange rate flexibility to the national marine economy.

Identifikasi Dampak Sanksi Ekonomi Terhadap Perekonomian Turki

This research aims to identify the economic sanctions obtained by the Turkish state and to know the data behaviour or trends in export data, imports, inflation, exchange rates and GDP before, during and after the provision of economic sanctions on the Turkish state. The study used secondary data from the presidential decree, newspaper, actual news, the official announcement which would later be processed into economic sanctions data, The World Bank, OECD, TÜIK, investing.com that some data was aggregated and processed by FRED. The study used the period before, on and after economic sanctions were granted to the Turkish state. After the data is collected, the analysis is then described in a descriptive and then illustrated through words and graphs, which will later use the techniques of deductive, inductive or mixed (deductive and inductive) and descriptive, that is collecting and compiling the necessary data in this study. The results of this study showed that economic sanctions in Turkey are present in various sectors and have a negative effect on affected sectors when economic sanctions are imposed against Turkey, So that if economic sanctions are not handled appropriately then this can make the Turkish economy continue to decline.

Consumer Confidence and Consumer Spending in Brazil: A Nonlinear Autoregressive Distributed Lag Model Analysis

The study explores the relationship between consumer confidence, household private consumer expenditure and other related macroeconomic financial variables for Brazil, a major, upper middle, income, Latin American country. It is widely discussed in the literature that the consumer confidence is an initial guide to the future behaviour of the economy based on the consumption path. Thus, a rise in the confidence of the consumer would lead to rising household consumption behaviour, which would percolate to accelerate economic growth. The study uses the nonlinear autoregressive distributed lag model (NARDL) to measure the effects of changes in consumer sentiment on private consumer spending, taking into consideration the significance of other financial variables, namely the rate of interest, stock market index, the exchange rate, inflation and unemployment trends. The study employs monthly data from the 4th month of 1995 to the 10th month of 2018. The bounds test of the NARDL suggests the presence of a cointegrating relationship among the variables. The model estimation affirms the presence of asymmetries in the behaviour of the major explanatory variables. In the short run, there are both positive and negative asymmetric impacts of consumer confidence index (CCI) on consumer expenditure, while the rate of interest has only negative asymmetries. In the long run, unemployment changes, stock market fluctuations, interest rate variation and alterations in the CCI shape the behaviour of consumer spending at the household level in Brazil. So, the consumers are able to perceive the signalling of the future behaviour of the market and contribute through consumption spending. JEL: C22, D12, E21, O54

Exchange Rate Volatility: An Asymmetric Tale from Mozambique

This paper inspects how risk is affected by news sign and size within – depreciation, appreciation, stability – distinct exchange rate trends, and by volatility model choice, taking on various asymmetric Generalized Autoregressive Conditional Heteroskedasticity models to daily Mozambique New Metical against South Africa Rand, MZN/ZAR, exchange rate over January 2010 - December 2014. Our results show that risk measurement and asymmetry of shocks to volatility depend on exchange rate trend, being that estimating the full sample conceals the actual behaviour, and model choice, specifically the degree of nonlinearity and persistence. In particular, we find that when positive/negative news type matches the sign of the exchange rate trend, risk increases by more. Interestingly, this means that in times of appreciation the good news turns out to be bad, likely because they raise the fear of overvaluation, under monitoring in natural resource producers and exporting countries. The findings contribute to the growing concern on nonlinear economic policy design, exchange rate targeting and surely international trade and investment decisions, where an incorrect assessment exchange rate risk and asymmetry may lead to mispricing of assets, namely options, and eventual underestimation of measures, as Value at Risk, relevant for Basel agreement.

Trend of Commodity Prices and Exchange Rate in Australian Economy: Time Varying Parameter Model Approach

Here we investigate the relationship between export commodity prices and AUD/USD exchange rate fluctuation using time varying parameter model. Using monthly data for over 30 years we found that exchange rate is determined by commodity prices and Australian base metal indices is highly correlated with country’s exchange rate. We have considered linear Gaussian state space model where common variance is treated as a stochastic time varying variable which gets considered for modeling economic time series.

Structure and dynamics of the molten alkali-chloride salts from an X-ray, simulation, and rate theory perspective.

Molten salts are of great interest as alternative solvents, electrolytes, and heat transfer fluids in many emerging technologies. The macroscopic properties of molten salts are ultimately controlled by their structure and ion dynamics at the microscopic level and it is therefore vital to develop an understanding of these at the atomistic scale. Herein, we present high-energy X-ray scattering experiments combined with classical and ab initio molecular dynamics simulations to elucidate structural and dynamical correlations across the family of alkali-chlorides. Computed structure functions and transport properties are in reasonably good agreement with experiments providing confidence in our analysis of microscopic properties based on simulations. For these systems, we also survey different rate theory models of anion exchange dynamics in order to gain a more sophisticated understanding of the short-time correlations that are likely to influence transport properties such as conductivity. The anion exchange process occurs on the picoseconds time scale at 1100 K and the rate increases in the order KCl < NaCl < LiCl, which is in stark contrast to the ion pair dissociation trend in aqueous solutions. Consistent with the trend we observe for conductivity, the cationic size/mass, as well as other factors specific to each type of rate theory, appear to play important roles in the anion exchange rate trend.

Kinetic Analysis of Ultrasound-Induced Oil Exchange in Oil-in-Water Emulsions through Contrast Variation Time-Resolved Small-Angle Neutron Scattering.

Ultrasound is one of the most commonly used methods for synthesizing and processing emulsion systems. In this study, the kinetics of acoustically induced emulsion oil exchange was examined using contrast variation time-resolved small-angle neutron scattering (CV-SANS). A custom-built sample environment was used to deliver acoustic forces while simultaneously performing CV-SANS experiments. It was observed that the oil exchange rate was significantly accelerated when sonicating at high acoustic pressures, where violent cavitation events can induce droplet coalescence and breakup. No significant oil exchange occurred at acoustic pressures below the cavitation threshold within the short time scales of the experiments. It was also observed that the oil exchange kinetics was deterred when emulsions were stabilized by surfactants. In addition, oil exchange rates varied nonlinearly with the concentration of surfactant, and exchange was slowest when the emulsions were stabilized by an intermediate concentration. It is hypothesized that emulsion size, electrostatic repulsion, and Gibbs elasticity of the oil-water interface play significant roles in the observed trends. The observed trends in oil exchange rates versus surfactant concentration coincide well with theoretical models for the fluctuation of the elasticity of the interface. Acoustically induced oil exchange was most inefficient when the interfacial elasticity was at its maximum value.

Equilibrium Exchange Rates And Misalignments: The Beer Approach

Bu çalışmada, BEER (Davranışsal Denge Döviz Kuru) yaklaşımı ile cari açık sorunu yaşayan 15 gelişmekte olan ülke için 1995-2012 döneminde uzun dönem denge döviz kuru ve sapmaların belirlenmesi amaçlanmıştır. Uygulanan panel veri analizi neticesinde, uzun dönem denge reel efektif döviz kurunun en önemli belirleyicisinin göreli verimlilik olduğu tespit edilmiştir. Ayrıca net yabancı varlık stokundaki değişmelerin de önemli etkiler yarattığı gözlenmiştir. Elde edilen uzun dönem denge reel efektif döviz kuru değerleri, ulusal ve uluslararası ekonomik gelişmelere bağlı olarak denge düzeyinden sapmaların dönemden döneme ve ülkeye göre önemli farklılıklar gösterdiğini ortaya koymuştur. Buna göre, 2008 küresel krizinin reel efektif döviz kurları üzerinde önemli etkilerinin olduğu görülmüştür. Hindistan, Polonya, Hırvatistan ve Litvanya’da reel efektif döviz kurunun uzun dönem denge düzeyinden sapmasının diğer ülkelere oranla düşük oranda olduğu ancak Güney Afrika, Mısır, Gana, Kolombiya, Uruguay, Bulgaristan ve Tunus’ta yüksek oranda olduğu belirlenmiştir. Türkiye için elde edilen sonuçlar, reel efektif döviz kurunun seyrinin genel olarak krizlerin habercisi olduğunu göstermiştir. Reel efektif döviz kurunun 2003’ten itibaren küresel krizin etkilerinin hissedildiği 2009 yılına kadar hem yurtiçi hem de küresel ölçekteki gelişmelere bağlı olarak denge düzeyine göre aşırı değerli olduğu ve sonraki süreçte 2011 yılından itibaren ise yaşanan gelişmelere bağlı olarak düşük değerli bir görünüme sahip olduğu belirlenmiştir.

The consequences of exchange rate trends on international tourism demand: evidence from India

Exchange rate is frequently considered as a key determinant in international tourism demand models. Tourism export is one of the major sources of India’s foreign exchange earnings. So understanding the dynamics of exchange rate and tourism is essential for planning and execution of tourism policies. This paper empirically investigates the extent to which exchange rate fluctuations affect India’s international tourism receipts. In order to achieve this goal, the paper employed quarterly data ranging from 2003Q1 to 2017Q4 within an Autoregressive Distributed Lag (ARDL) framework. Using Wald coefficients, the study found cointegration among the variables. It further discovered that variables are correcting the shock-induced disequilibrium at a high speed of 96%. Furthermore, the study established a significantly negative link between exchange rate and international tourism receipt. We also found that the overall impact of the exchange rate is time-invariant, i.e. having similar long-run and short-run impacts on international tourism demand, though the short-run magnitude is higher than the long-run one. The outcomes of this study help practitioners to frame suitable policies to manage their currency exposure. Based on findings, the study suggests better management of the exchange rate to protect the external competitiveness of rupee for attracting more foreign tourists. Moreover, development of innovative hedging instruments helps to reduce currency exposure of international tourists.

Pengaruh inflasi dan jumlah uang beredar terhadap nilai tukar rupiah dengan pendekatan model struktural VAR

The purpose of this study are, firstly to analyze exchange rate trends of rupiah, centtral bank policy rates, inflation and money supply in Indonesia from January 2019 to December 2019. Secondly, to analyzes the effect of central bank policy rate, inflation and the money supply to the rupiah exchange rate in January 2013 – Desember 2018. The method used in this research are descriptive and quantitative analysis with trend analysis tools and multiple linier regression VAR models with the Ordinary Least Square (OLS). The results of the study found that, the first trend data from the rupiah exchange rate variable of January 2019 period – December 2019 of IDR 15.145 US$, the central bank’s policy interest rate was 4.5 percent, inflation was 2.15 percent and the money supply was an average of Rp.5.966.9112,17 billion. Secondly, from the processed data it was found that central bank policy rates and the money supply has a positive effect on the rupiah exchange rate of January 2013 period – December 2018. While the inflation variable has a negative impact on the rupiah exchange rate of January 2013 period – December 2018. Keywords : Rupiah exchange rate, Central bank policy interest rate, Money supply

Analysis of Influencing Factors of RMB Exchange Rate Trend Based on Least Square Method

The exchange rate is the currency ratio between countries, which determines what standard is equitable for the distribution of the benefits of economic transactions between countries. There are many factors affecting the change of RMB exchange rate, such as inflation rate differential, commodity price, economic growth rate differential, foreign exchange reserve and international balance of payments. In this paper, the least square method is used to analyze the exchange rate’s influencing factors. The results show that the balance of payments, commodity prices and the dollar against the RMB exchange rate has a negative correlation. Inflation, gross domestic product, foreign exchange reserves and the dollar against the RMB Exchange rate has a positive correlation.

New Currencies in the International Financial Architecture: A Hypothesis of the BRICS Currency Unit

The subjects of the research are the transformation of the international financial architecture resulting from the internationalization of some currencies of the BRICS countries, mainly the yuan; the position of the BRICS currencies in the world monetary system; and a possibility of creating a common payment unit in the context of collective currencies, cryptocurrencies and similar monetary and financial products. Based on the correlation analysis of the dynamics of the BRICS currency quotations, the paper expresses a hypothesis about a possibility of concluding a monetary union and creating a common BRICS currency. The purpose of the research was to develop the principles of creating a common payment unit for the BRICS countries both for mediation of international economic relations and for wider international circulation. Based on the methods of analogy, comparative analysis, plotting and statistical forecasting, it is proved that the BRICS currency cannot be built on the cryptocurrency principles. It is stated that emission of the BRICS currency as a cryptocurrency will lead to the anarchy of currencies, which will naturally create conditions for the destruction of the monetary union, elimination of the new currency and preservation of the dollar dominance in the global monetary system. The novelty of the research findings lies in obtaining a formula for calculating the amount of the new BRICS currency needed for international circulation. The theoretical significance of the research is the development of a methodology for establishing the exchange rate of the collective currency for the BRICS countries. The practical importance of the research findings is manifested by determining a potentially new BRICS exchange rate in relation to the currencies of the leading countries, plotting the BRICS currency exchange rate trends to predict the limits of currency fluctuations in accordance with the scenarios from the most optimistic to the most pessimistic.

Collective Perception and Exchange Rates

ABSTRACTThe authors' research suggests that people search online for information on currency exchange rates and that this information-seeking process can be translated into data on people's interest for a given currency. The authors utilize Google Trends data to capture the level of interest in 3 currency pairs: the euro, the pound sterling, and the Canadian dollar against the U.S. dollar and conduct a multivariate data analysis in the context of vector-autoregressive models. The findings suggest that there is a small but significant impact on collective perception on exchange rates. The authors show that Google Trends data could be an important source of information for investors looking into exchange rate trends.

Predictions models of Taiwan dollar to US dollar and RMB exchange rate based on modified PSO and GRNN

Exchange rate adjustment is an important means for a country’s monetary policy, especially for countries that are dependent on the import and export trade, exchange rate policy has a strong impact on the profits of import and export traders, and therefore various countries are very prudent for the adjustment of the exchange rate, and even an exchange rate forecast system is provided for government policy-makers to make decisions. So, this paper proposes a new exchange rate prediction modeling technology. First, it collects data about Taiwan dollar (TWD) to USD and RMB exchange rate, and draws a trendency chart to explore the characteristics of both the exchange rate and possible future trends; then separately calculates technical indexes of TWD to USD and RMB exchange rate referring to stock technical index; finally, smoothing parameter $$\sigma $$ of two kinds of modified PSO-GRNN models are used to construct TWD to USD and RMB exchange rate prediction models, and compared with the other two kinds of prediction models. Research results demonstrate that TWD to USD and RMB exchange rate trends have different characteristics; we can see from four indexes that RWPSO-GRNN smoothing parameter $$\sigma $$ has better prediction ability than other three models.

Renminbi internationalization: progress and comparison

This study analyzes how Renminbi (RMB) internationalization policies affect RMB exchange rates between 2010 and 2016 using the VAR (Vector Auto-Regressive) model. The results show that many RMB internationalization policies have distinct impacts on the central parity rate, onshore exchange rate, and offshore exchange rate. Policies have the greatest effect on the offshore exchange rate, followed by the onshore rate, and the central parity rate. Further, changes in the RMB exchange rates can be divided into three stages. In the first stage, as the onshore exchange rate was subjected to the daily trading band at 0.5% around the central parity rate, the onshore exchange rate converged toward the central parity rate. Then, after the central bank widened the band of the onshore exchange rate on April 16, 2012, the onshore exchange rate followed the trend of the offshore exchange rate. After the 811 exchange reform in 2015, the central parity rate dominated the pricing power again.

Real Exchange Rates Determination: Purchasing Power Parity (PPP), and Balassa-

The Balassa and Samuelson hypothesis -- BS -- (Balassa, 1964, Samuelson, 1964), which natural point of departure is the Salter-Swan (dependent economy) model is analysed. It offers general theoretical justification of the long-run trends in real exchange rates in relation to productivities and prices. This is to say, that taking into consideration the important real world feature of having both tradable and non-tradable goods BS states that if a given country’s productivity in producing tradable goods compared to its productivity in making non-tradable goods and services rises more rapidly than in a (certain) foreign country, then the home country real exchange rate will experience appreciation. Thus if productivity of factors of production grows faster in the home country tradable sector, then relative price in the non-tradable sector should rise. Furthermore, we provide supporting illustrative evidence by empirically assessing the BS effect for Azerbaijan.